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Starting today Google has integrated results from Code Search as snippets in the main search results page. Code Search was launched by Google in October of 2005 as a seperate vertical search property. As the name suggests, Code Search indexes and parses source code on the web and provides users a simple but flexible search and repository browsing interface.

For a Google property such as Code Search, integration into the main large-scale traffic flow via the primary search results page is an indicator of product maturity. Previously seperate properties such as Finance and Maps followed a similar development and audience exposure path.

Users of Code Search are able to locate reference implementations of common algorithms or routines, or search for best or worst practices amongst the code published and available. and queries filter based on license, language, package and more. Code Search competes with both Krugle and Koders, startups that were both founded prior to the launch of the Google code search service but that both provide their own unique features respectively.

Last week Google announced a number of improvements to Code Search, namely improved code highlighting, browsing (especially with larger projects) and ability to refine results based on class, project, file etc.

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Even back in January when Microsoft agreed to pay $1.2 billion for enterprise search company Fast Search & Transfer, it was mired in an accounting scandal and trading in its stock had been suspended. Its aggressive accounting for phantom deals that never materialized earned it the moniker the “Enron of Norway.” But more sordid details keep coming out from some tenacious reporting by the Norwegian press.

The latest account comes in the June 28 issue of the Norwegian magazine Dagens Næringsliv. In an article (in Norwegian) by Trond Sundnes, Dagens Næringsliv, Gøran Skaalmo, the magazine details how the Norwegian company booked free software trials as revenues, and how its executives set up shell corporations for allegedly self-dealing purposes. A translated version of the article (embedded below) is making the rounds among Fast’s competitors and inside Microsoft itself.

The problems at Fast were financial in nature and tied to an overly aggressive sales culture, which arguably Microsoft can fix. But it does point to a certain blindness on the part of Microsoft, or at least a willingness to look the other way, in its obsessive quest to become a player in search (see Yahoo and Powerset). It also raises questions about Fast’s underlying search technology. If Fast was having trouble closing deals for its products, how good can its technology really be?

According to the article, Fast had booked $50 million in fake revenue, $20 million in fictional contracts, and former top executives closely linked to CEO Markus Lervik siphoned off $6 million to shell companies they controlled. Lervik continues to lead the business and is currently the vice president for enterprise search at Microsoft.

Some of the details from the article include:

—The company had an aggressive practice of giving enterprise customers free trial periods and marking them down as tentative deals.

—One of these was a large $18 million deal with Australian Telecom company Telstra that the company recognized as revenues in late 2006. But the deal then failed to materialize.

—A second deal for which Fast never got paid was with Accoona, another shady search company.

—An audit uncovered unauthorized payments to a shell company in Fort Myers, Florida called Archtech that is owned by a former Fast VP, Peter Bauert and Fasts’s former CFO Ali Riaz (through yet another company he controls called Bluebird Collabo). That’s Riaz in the Audi pictured above.

Lervik never responded to repeated requests for comment, but Microsoft did. It sent adjusted annual reports for 2006 and 2007 which noted that over 30 million Norwegian Kroner ($6 million) was “irregularly” paid and “wrongly approved” to:

. . . companies owned or controlled by persons who at the time of the transactions were closely related parties.

That is an apparent reference to Archtech and other shell companies that were supposedly reselling Fast software. The problem, according to the the documents Microsoft provided, was that these related companies “purchased” $3.5 million worth of software licenses for which Fast was never actually paid.

I always wondered what the “transfer” part of Fast Search & Transfer referred to.

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My first post for ReadWriteWeb (nearly a year ago) started with the premise that search was "game over", that Google had won and the only opportunity left was (re)search - i.e. what one does after the basic search. Unfortunately, none of the search start-ups since then has made a dent in Google's relentless march towards search market dominance. In this article, we outline 11 search trends that may change that.

The proposition that launched countless search start-ups was: "If we can get just 1% of the search market, we will have a very valuable business". That may be true, but getting 1% has proved elusive. It has been an all or nothing game.

That may be about to change.

It is possible that Google will not be beaten by one big competitor. It is possible that they will be pecked at by thousands of tiny start-ups using a new outsourced infrastructure.

But before getting to that punchline, here is my 11 point recap of the search market:

1. Disambiguation is (still) not enough motivation to switch. All those learned PhDs with backgrounds in natural language search and AI explaining that the words "paris" and "apple" have multiple meanings that Google cannot parse from a single search, massively miss the point. The average user has figured that out and either enters multiple words or refines the search based on the first search. Using natural language search - which is complex to code and expensive to process - is a classic "hammer to crack a nut" solution.

2. Webmaster push-back and basic economics will accelerate the trend towards an outsourced crawler market. Webmasters won't accept a proliferation of crawlers as some of them maybe malicious and all of them impact performance to some degree. Google Yahoo Microsoft (GYM) will always be accepted as they drive enough SEO, but marginal crawlers will struggle. Basic economics mean that only a very small number of players will be able to afford the giant server farms needed to index the whole Web. The YM parts of GYM (as well as Amazon) will increasingly offer their infrastructure to anybody who can build value on top.

3. Yahoo Search Monkey may have arisen from desperation, but we may also be witnessing a "Linus moment". SearchMonkey is the most well-defined entry into the outsourced crawler market. It comes from their recognition that it is too late to beat Google in a head to head battle, so it could be dismissed as a sign of desperation. However I prefer to see it as a "Linus moment", that point in time when Linus Torvalds simply said "here is what I have done so far, anybody who can take it to the next step is welcome to try". To be truly disruptive, Yahoo may need to open this up even more than they have to date.

4. There will be many more attempts to monetize Wikipedia. Well-funded search ventures such as Powerset have retreated to the much narrower goal of searching Wikipedkia. Freebase also uses Wikipedia as the their core data. Walking around the RPI Web Science Research Initiative, I could see many interesting R&D experiments coming out of Academia all of which used Wikipedia as a base. Wikipedia has just enough structure and normalization to be useful. Above all, the History feature makes "data provenance" possible and that is critical for trust.

5. Core search is still getting funded. This is not what one would expect in what is by any definition a consolidated market with one mighty big gorilla sitting on top. Look at Blekko getting $2m without even a prototype to show the world. Are the investor's nuts? Possibly, but they include some pretty smart guys like Marc Andreessen and the founder Rich Skrenta is clearly a smart guy (his Blog is a good read). Or look at Cuill, which got $25m as recently as April. Maybe they are idealists tilting at windmills. Maybe they know something that the rest of us don't. Only time will tell. These new entrants will eschew any hype, which they know has not one single point of value in adoption.

6. Image search is another "hammer to crack a nut". Searching images, video and audio is one of those "non-trivial" computer science projects that great engineers love to tackle. However great investors should steer clear. It is hard to code and incredibly expensive to process. The competition is tagging (see next point) which is classic "just good enough and improving all the time at virtually no cost" that is impossible to beat.

7. Tagging is quietly but massively disruptive. The fact that thousands of webmasters and bloggers tag their content so that they can be found by Google is Google's secret weapon. But it could get turned against them. A small incentive to be found by other search engines will change tagging behavior. This is likely to play out in lots of vertical niches, where a small change in tagging behavior can make a huge difference in findability and that can make a big difference to both buyers and sellers. Whether people use RDF or Microformats or some other defacto vertical standard will continue to be the subject of much debate, but the format itself is not the issue. The human drive to tag (to order one's world) is deep and strong and has financial motivations as well.

8. Whitelist is a good way to kill spam. Spam is the big problem for search as well as email and whitelists work well for both. In search this is done by a site that uses something like Google Custom Search Engine (or Search Monkey) to define what sites to search within a defined domain. Even if that means defining 1,000 sites and adding new ones every day, that is well within the range that a single human curator can do within a single market domain. The human curator deletes any spam sites manually.

9. P2P search could still be a long-term disrupter and Microsoft's route back to relevance. The only way to do search without putting all the Web's pages into one server farm is via P2P. I have written about Faroo's attempt here. It relies on .Net and this maybe Microsoft's card to play but only if Vista gets real traction. This is a real long shot, but an intriguing one.

10. There is tons of great data inside relational databases that is quite easy to search. It is the HTML layer that is getting in the way. As more sites learn how to expose their structured, relational databases as Web Services APIs, a lot more data will be available that does not rely on word search on HTML pages.

11. It's the Adwords, stupid! All the search wizardry don't matter a hoot if the monetization is not done right. There is plenty of motivation out there. Sellers want cheaper search words to buy. Publishers want a bigger piece of the cake. Buyers/searchers may even want cash back (we will see if Microsoft's crude tactic, lambasted in the Blogosphere, makes it in the real world).

Conclusion

Most of these trends point in the direction of search as infrastructure feeding thousands of innovators in niche markets - a long tail approach, in other words. Google will play in this infrastructure game - they already do with Google Custom Search - but it is vendors such as Yahoo, Microsoft and Amazon with equally deep pockets and much more to lose from total Google dominance, who will be the disrupting innovators in this next phase of the search market.

Image credit: davemc500hats